Carlton chiefs take pay cuts after moderate profit growth
Wednesday 21 January 1998
According to figures disclosed in Carlton's annual report, Mr Green received total remuneration of pounds 558,060 last year. That was pounds 169,000 less than in 1996, when his pay reached pounds 727,090. Although Mr Green saw his basic salary increase from pounds 470,000 to pounds 495,000, his annual bonus was cut from pounds 232,250 to just pounds 18,562.
According to the report of Carlton's remuneration committee, the company paid executive directors an annual bonus of just 3.75 per cent of salary last year. The bonus, which can be up to 50 per cent of salary, is related to "year-on-year real growth in earnings per share". Last year, Carlton's earnings per share before exceptional items grew by just 5 per cent as profits were hit by the strong pound and troubles at the company's video production division.
Mr Green was not the only Carlton director to take a pay cut. June de Moller, the managing director, saw her pay total pay fell from pounds 380,278 to pounds 289,091, while finance director Bernard Cragg, the finance director, was paid pounds 252,202 - a drop of 25 per cent.
However, Nigel Walmsley, the director who runs Carlton's Television arm, enjoyed a pay rise. The remuneration committee rewarded him for his "exceptional contribution" in helping British Digital Broadcasting (BDB), Carlton's joint venture with Granada, win the bidding for three terrestrial digital television licences by paying him a discretionary pounds 150,000 bonus. That took his total pay to pounds 423,711 from pounds 363,968 the year before.
Last year was also a poor one for payments under Carlton's long term incentive scheme. The company made no payments at all in 1997, compared to the previous year, when the four current executive directors shared pounds 1.87m, two thirds of which went to Mr Green.
Carlton's incentive scheme awards directors' shares which can be cashed in depending on the company's share price performance over a three year period. If the shares are in the top 25 per cent of FTSE 100 stocks over the period, directors receive the full award. If Carlton finishes in the bottom 35 per cent of its peer group, no bonus is paid.
In 1997, Carlton shares were among the worst performers in the FTSE, falling 9 per cent while the index rose by more than a fifth. Investors are worried that the group's heavy investment in setting up BDB, which is scheduled to start broadcasting in the autumn, will take years to pay off. Meanwhile, it faces competition from the satellite broadcaster BSkyB, which is launching its digital service before the end of June.
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